The big news in the past 48 hours is that the NFL players have approved the deal negotiated with the owners and that there will be professional football played in the USA this year.<\/p>\n
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This news obviously excited football fans. But it also excited me as more than just a football fan, but also as a teacher and student of the art of negotiation, specifically procurement negotiation.<\/p>\n
There was an interesting technique used in the negotiation between the NFL owners and players to end the lockout that had persisted for nearly five months. That technique was described in the article \u201cHackenberg: Ace in hole flips labor landscape\u201d published in last Wednesday\u2019s Pittsburgh Post-Gazette.<\/p>\n
In the above-linked article, Dave Hackenberg writes that \u201cthe players had a mighty big card hiding in the hole, a weapon so secret that the vast majority of NFL Players Association members didn\u2019t even know of its existence. Neither did the league\u2019s owners. But since they were enlightened Thursday morning, negotiations toward a new collective bargaining agreement have proceeded at warp speed.\u201d<\/p>\n
What was this secret weapon that transformed a stalled negotiation into one that suddenly accelerated the reaching of an agreement?<\/p>\n
It was having, and revealing at precisely the right time, what is known as a BATNA \u2013 Best Alternative To A Negotiated Agreement. I\u2019m not 100% sure of the origin of this term, but I believe it to be from the groundbreaking negotiation book \u201cGetting To Yes.\u201d<\/p>\n
When you have a BATNA, you have much more leverage in a negotiation. If the other side finds out about your BATNA and it is a decent alternative, they won\u2019t be able to \u201cpush you around.\u201d<\/p>\n
What was the players\u2019 BATNA?<\/p>\n
It was having an insurance policy that would pay each player $200,000 if a lockout preempted the entire 2011 football season. This insurance policy reportedly cost the players $10 million.<\/p>\n
The article says that the attempts to reach agreement \u201cwere at a standstill despite a marathon negotiating session a week ago. Afterward, [the players\u2019 association\u2019s executive director, DeMaurice Smith] and his executive committee decided it was time to flip over their hole card in this high-stakes poker game\u2026It would be an understatement to suggest [the revelation of the insurance coverage] got the attention of the owners.\u201d<\/p>\n
Selecting the right time to reveal their alternative undermined the owners\u2019 negotiation strategy, which was \u201cto wear the players down by dragging [the lockout] out.\u201d As you heard on last week\u2019s Next Level Purchasing Association monthly webinar on IT negotiations, \u201cthe key to victory is not defeating the enemy, but in defeating the enemy\u2019s strategy; therein lies their vulnerability.\u201d (Sun Tzu, \u201cThe Art of War\u201d)<\/p>\n
The article closes by saying that, to \u201csome millionaire athletes, $200,000 might be chump change. But it would pay the light bill and put groceries on the table. Most important, it would foster the solidarity needed by the players to dig in for the long haul. The owners and commissioner, Roger Goodell, who has been battered in the court of public opinion, thought time was on their side. But DeMaurice Smith flexed his muscle, showed his ace in the hole, and the owners blinked.\u201d<\/p>\n
Now, I know that this negotiation process isn\u2019t an easily applicable template for procurement situations. You can\u2019t tell your suppliers \u201cWe have lockout insurance\u201d and then suddenly expect them to give you the price reductions you\u2019ve been pushing for.<\/p>\n
But, you know what? DeMaurice Smith didn\u2019t have a template for his negotiations. If previous labor disputes had been resolved in exactly this way, the owners would have been prepared and that \u201csecret weapon\u201d would have been powerless.<\/p>\n
So, sometimes, you need to come up with never-done-before ways of breaking a negotiation deadlock. Use the NFL lockout negotiations as inspiration for you to find new, creative, and surprising ways to persuade your suppliers. The \u201cwe\u2019ll just buy from another supplier\u201d line is old, predictable, and sometimes easy to see through.<\/p>\n
What type of out-of-the-box \u201cace in the hole\u201d can you think of to use in your negotiations with suppliers? Post in the comments below and help your fellow procurement professionals.<\/p>\n
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